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the Central Sales Tax Act, 1956
Section 14 in the Central Sales Tax Act, 1956
State Of A.P vs S.B.P.V.Chalapathi Rao on 24 October, 1994
Income Tax Officer vs M.K. Mohammed Kunhi on 11 September, 1968
Collector Of Central Excise, ... vs Indian Tobacco Co. Ltd. on 14 July, 1994

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Andhra High Court
State Of Andhra Pradesh vs Sales Tax Appellate Tribunal And ... on 2 April, 1996
Equivalent citations: 2003 133 STC 132 AP
Author: S S Quadri
Bench: S S Quadri, Y Narayana



ORDER
 

 Syed Shah Mohammed Quadri, J. 

1. The State of Andhra Pradesh is the writ petitioner.

2. The order of the Sales Tax Appellate Tribunal, Hyderabad in T.M.P. No. 63 of 1996 in T.A. No. 233 of 1996 dated March 22, 1996 is assailed in the writ petition arid a writ of certiorari is prayed for to call for the records relating to and connected with that petition and to quash the said order. The above relief is sought in the following circumstances.

3. On January 17, 1996 the Assistant Commissioner (CT) No. III, Enforcement passed the final order of assessment and raised a demand of Rs. 90,52,975 against the second respondent-assessee. That order appears to have been served on the assessee on January 20, 1996. The validity of that order was questioned before the Appellate Deputy Commissioner, Secunderabad by the second respondent on February 2, 1996. That appeal was accompanied by a stay petition. On February 7, 1996 the Appellate Deputy Commissioner dismissed the stay petition. However, fifteen days' time was granted for payment of tax. The second respondent approached the Joint Commissioner (Legal) under Section 19(2-B) of the A.P. General Sales Tax Act (hereinafter referred to as "the Act") assailing the order of the Appellate Deputy Commissioner passed in the stay petition on February 7, 1996. The revision petition was entertained by the Joint Commissioner and interim stay was granted on February 23, 1996. The interim order was, however, vacated on the application of the Assistant Commissioner on March 19, 1996. The second respondent filed an appeal T.A, No. 233 of 1996 before the Sales Tax Appellate Tribunal ("STAT") against the order of the Joint Commissioner dated March 19, 1996. In the said appeal the second respondent filed a petition for stay (TMP No. 63/96) praying the Tribunal to stay the collection of tax of Rs. 90,52,975. The STAT passed interim order dated March 22, 1996 granting stay of all further proceedings pursuant to the orders of the Joint Commissioner dated March 19, 1996. It is the correctness of that order that is assailed in this writ petition.

4. The learned Advocate-General, appearing for the petitioner, contends that the STAT had no jurisdiction to pass the order, therefore the interim order suffers for want of jurisdiction and is liable to be quashed. He submits that under the scheme of the Act where an appeal is provided to the STAT, the Legislature has excluded from the jurisdiction of the STAT the power to grant interim orders, therefore in any event the STAT ought not have passed the interim order.

5. Dr. Murthy, learned counsel who is appearing for the second respondent, took notice for the second respondent and submitted that the appeal is maintainable under Section 21(1) of the Act. It is contended that Section 21(6) of the Act does not preclude the STAT from granting stay of further proceedings pursuant to the orders under appeal to the STAT and what the STAT had done by passing the impugned order, is only to stay the proceedings pursuant to the order under appeal. In any event, the learned counsel contends, the appeal is maintainable in the STAT and the STAT has inherent powers to grant interim orders and therefore the impugned order cannot be assailed as without jurisdiction.

6. On the above contentions the short question that falls for consideration is : Whether the STAT has power to grant interim order in an appeal filed against the order of the Joint Commissioner declining to grant the stay of recovery of tax ?

7. It would be necessary to refer to the relevant provisions of the Act here. Section 19 of the Act provides remedy of appeal to any dealer who intends to object to any order passed by any authority under the provisions of the Act. Orders passed or proceeding recorded by a Joint Commissioner, Deputy Commissioner under Sub-section (4-C) of Section 14 of the Act are excluded from the purview of Section 19 of the Act. Sub-section (2-A) of Section 19 of the Act says that where an appeal is admitted under Sub-section (1), the appellate authority may order stay of collection of the tax under dispute pending disposal of the appeal, subject to furnishing of such security or on payment of such part of the disputed tax within such time as may be specified. It would be appropriate to note here that Sub-section (2-B) of Section 19 of the Act, confers the right of revision on the appellant where stay application has been dismissed by the appellate authority. Such a revision has to be filed within thirty days from the date of the order of refusal to grant stay. The Joint Commissioner is, however, conferred with the power to order stay of collection of tax under dispute subject to such terms and conditions as he may think fit. The order, if any, passed by the Joint Commissioner will be operative during pendency of the appeal by the appellate authority. There is also another peculiar provision in the Act which may be noticed here and which provides that if a dealer has preferred an appeal to the Appellate Tribunal ("STAT") under Section 21 of the Act, the stay, if any, ordered under Sub-section (2~B) of Section 19 of the Act shall be operative till the disposal of the appeal by such Tribunal ("STAT"). So also the stay granted by the appellate authority under Sub-section (2-A) of Section 19 of the Act will be operative till the disposal of the appeal by the Tribunal ; but for that purpose the Joint Commissioner has to be approached by filing an application and he has to record an order to the above effect. Section 21 of the Act, with which we are concerned here, so far as it is relevant for our purpose, reads as under:

"21. Appeal to the Appellate Tribunal.--(1) Any dealer objecting to an order passed or proceeding recorded--

(a) by any prescribed authority on appeal under Section 19, or

(b) by a Joint Commissioner or Deputy Commissioner suo motu under Sub-section (4-C) of Section 14 or under Sub-section (2) of Section 20, may appeal to the Appellate Tribunal within sixty days from the date on which the order or proceeding was served on him."

8. A plain reading of the above provision makes it evident that the order passed or proceedings recorded by any prescribed authority on appeal under Section 19 of the Act and the order passed by the Deputy Commissioner either suo motu or under Sub-section (4-C) of Section 14 or under Sub-section (2) of Section 20 of the Act, is appealable to the Appellate Tribunal ("STAT") provided the appeal is filed within sixty days.

9. Dr. Murthy argues that Clause (a) of Sub-section (1) of Section 21 of the Act provides an appeal against an order or proceeding recorded by any prescribed authority on appeal under Section 19 of the Act, which includes either interlocutory order or the final order as the case may be. Inasmuch as the appeal was filed against the order which arose out of the interlocutory order passed by the appellate authority, the appeal is maintainable and the impugned order is within the jurisdiction of the STAT. In our view the contention of the learned counsel is wholly misconceived. The order appealed against before the STAT, is not an order passed on appeal under Section 19 of the Act. It is an order passed by the Joint Commissioner in exercise of the revisional power conferred under Sub-section (2-B) of Section 19 of the Act. It is an order passed on a revision and not on an appeal. Merely because Section 19 of the Act is referred to in Clause (a) of Section 21, it cannot be contended that the order passed on revision under Sub-section (2B) of Section 19 of the Act should also fall within the meaning of the order passed under Section 19 of the Act. We are, therefore, of the view that the STAT has no power and or jurisdiction to pass the impugned order.

10. The next contention is based on Sub-section. (6-A) of Section 21 of the Act which reads as under :

"The payment of tax and penalty, if any, due in accordance with the order of the first appellate authority or of the Deputy Commissioner suo motu under Sub-section (4-C) of section or in revision under Section 20, in respect of which an appeal has been preferred under Sub-section (1), shall not be stayed pending disposal of the appeal."

11. That provision, in our view, has to be read along with subsection (6) of Section 21 of the Act. Sub-section (6) of Section 21 provides that where a dealer objects to an order passed or proceeding recorded by the Deputy Commissioner of Commercial Taxes under Sub-section (4-C) of Section 14 or suo motu under Sub-section (2) of Section 20 of the Act and has preferred an appeal from such order or proceedings to the Appellate Tribunal, the Joint Commissioner may, on an application made by the dealer, subject to such terms and conditions, as he thinks fit, order stay of collection of the tax under dispute pending disposal of the appeal by the Appellate Tribunal (STAT). Sub-section (6-A) of Section 21 of the Act is a proviso to Sub-section (6) of Section 21 of the Act and controls the provisions of Sub-section (6) of Section 21 of the Act. It enumerates three types of orders in respect of which appeal is preferred before STAT but no stay can be granted ; that is, tax and penalty due by virtue of fi) order of the first appellate authority

(ii) order of the Deputy Commissioner

(a) suo motu under Sub-section (4-C) of Section 14, or

(b) in revision under Section 20.

12. It would be appropriate to note here that in cases where the Appellate Tribunal ("STAT") had been conferred powers to entertain the appeal, the power to grant stay of recovery of tax is not conferred on the Tribunal but is conferred on the Joint Commissioner. So it goes without saying that where no appeal is provided to the Tribunal, the Tribunal cannot arrogate to itself the power to grant interim stay of recovery of sales tax in question.

13. It is then contended by Dr. Murthy that the petitioner has claimed writ only for quashing the interim order but has not sought writ of prohibition with regard to the entertaining the appeal, so this Court cannot go into the question of maintainability of the appeal. It is true that the claim in the writ petition is confined only to the order passed in the T.M.P. But where it becomes necessary to determine the jurisdiction of the authority in passing the order which is impugned in this writ petition, incidentally this Court can go into the question as to whether the appeal is maintainable. In that context we are of the view that as the appeal is not an inherent right of a litigant but that is a right created by the statute, the power of the Appellate Tribunal ("STAT") is confined within the four corners of the provisions under which the right is conferred. On examining the provisions of Sections 19 and 21 of the Act, we are of the view that the appeal against the order of the Joint Commissioner vacating the stay and dismissing stay petition is not maintainable by the Tribunal and, therefore for this reason also the impugned order could not have been passed by the Tribunal.

14. However, relying on the judgment of the Supreme Court in State of Madras v. Swasthik Tobacco Factory , it is contended that the phrase "an appeal under Section 19" in Clause (a) of Section 21(1), includes the orders like the order passed by the Joint Commissioner under Sub-section (2-B) of Section 19. In that case the question that arose for consideration of the Supreme Court was the meaning of the expression "in respect of the goods" used in rule 5(1)(i) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. Those words were interpreted to mean only "on the goods". It is submitted that the words "on appeal" used in Sub-section (1)(a) of Section 21 of the Act, would mean "in respect of an appeal" and if so interpreted the order passed in the T.M.P. will be well within the jurisdiction of the Tribunal. We are afraid we cannot accede to the contention of the learned counsel. The order appealed against before STAT, is not an order passed in respect of an appeal, but it is an order passed on revision in respect of giving effect to the order of assessment for recovery of tax due. Therefore, the order appealed against cannot be brought under Sub-section (1)(a) of Section 21 of the Act.

15. The learned counsel next relied on the judgment of a division Bench of this Court in State of A.P. v. V.B.C. Fertilizers & Chemicals Ltd. . The question in that case was, whether the prohibition contained in Sub-section (1)(a) of Section 21 takes in its fold the power of the Appellate Tribunal to pass interlocutory orders in the interests of justice, pending disposal of appeal before it, including the power to grant stay of further proceedings pursuant to the orders of remand under which the assessing authority has to take further proceedings. It is laid down that Sub-section (6-A) of Section 21 of the Act relates to recovery of tax or penalty and it is clarified that the stay granted by the STAT in that case operated only to such further proceedings as were to be taken pursuant to that part of the order allowing the appeal and remanding the case for further enquiry. That case did not decide that STAT can grant stay of recovery of tax or penalty. Therefore, the judgment in that case also does not help the petitioner.

16. Finally it is submitted that the Appellate Tribunal had inherent powers to pass all necessary and incidental orders. In support of his submission, the learned counsel has relied on the decision reported in Income-tax Officer v. Mohammed Kunhi [1969] 71 ITR 815 (SC). There the question was, whether the Income-tax Appellate Tribunal has power to grant stay as incidental or ancillary to its appellate jurisdiction. The Supreme Court has laid down the rule that an express grant of statutory power carries with it by necessary ' implication the authority to use all reasonable means to make such grant effective ; the powers which have been conferred by Section 254 of the Income-tax Act, 1961, on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective. The ratio in that case has no application to the present case where the power conferred on the Appellate Tribunal under the APGST Act is a truncated power because the power to grant stay is specifically excluded by the statute. Further, the question of exercising such incidental power, excluding power to grant stay of recovery of tax, would arise only when the appeal filed before the Tribunal is a competent appeal. As already observed, the appeal itself is not maintainable, therefore, the theory of incidental or ancillary power cannot be invoked.

17. For the aforesaid reasons, we quash the order in T.M.P. No. 63 of 1996 in T.A. No. 233 of 1996 dated March 22, 1996 on the file of the Sales Tax Appellate Tribunal, Hyderabad and accordingly we allow the writ petition. Having regard to the facts and circumstances of the case and as the writ petition is disposed of at the admission stage itself, we make no order as to costs.

18. Immediately after pronouncing the order, Dr. Murthy requests that leave to appeal may be granted. In our view no question of law of general importance which requires to be decided by the Supreme Court, arises in this case. We, therefore, reject the oral request for leave to appeal to the Supreme Court made by the learned counsel.